Long-term Management Vision and Medium-Term Business Plan
Long-Term Vision KV2027, 2019 Medium-Term Business Plan
Growth strategy must be based on the new reality
- Stronger existing core businesses are essential for growth
- Social issues such as QOL and preventative healthcare create growth opportunities bridging food and pharmaceuticals
Changes in society
- Global increase in natural disasters
- Greater uncertainty caused by drastic changes in economic systems
- Corporations expected to contribute to resolving social issues
Changes in the market
- Maturation of beer market in developed countries global shift towards craft beers and premium products
- Expansion of regulations for alcoholic beverages and mounting pressure to implement sugar tax
- Introduction of public policies to reduce healthcare costs
Redefine business domain to enable sustainable growth
2019 MTBP is the first stage of KV2027
Kirin Group 2019-2021 Medium-Term Business Plan
February 14, 2019
Basic Policy
- Shift gear from revitalization to new growth by creating a foundation for the Kirin Group
- Maximize corporate value by enhancing shareholder returns
Key Initiatives
Implement 3 specific strategies as the first stage of KV2027
- Profit growth of existing businesses
Food: Further strengthen profitability
Pharmaceuticals: Achieve outstanding growth - Establish and foster new businesses bridging Pharmaceuticals and Food & Beverages
- Strengthen organizational capabilities for innovation
Key Performance Indicators
Non-financial targets:
Aim to improve shareholder value by continuing to grow normalized EPS while ROIC has been adopted as a new financial target due to prioritization of growth investment
- Normalized EPS: CAGR5%+
- ROIC: 10%+ by FY2021
Non-financial targets:
Aim to create shared value with our stakeholders, society & the environment, consumers, and employees by setting 3 non-financial targets.
- CSV Commitment
- Corporate Brand Value* US$2.2bn+ by FY2021
- Employee Engagement Score 72% by FY2021
- Use the evaluation of the Kirin brand value in the Brand Ranking created/ released every year by Interbrand Japan
Financial Strategy
Aim to maximize corporate value by using the operating cash flow generated by the growth of existing businesses for stable dividends and disciplined growth investments, as well as by considering flexibly allocating the cash to additional shareholder returns.
Balanced investment
Control maintenance and renovation investment, and make proactive investments with high asset efficiency and market attractiveness
Enhanced shareholder returns
Increase consolidated dividend payout ratio (from 30%+ to 40%+ of normalized EPS), and consider additional shareholder returns
Disciplined investment
Use NPV and ROIC as criteria based on cost of capital
Investment in creation of intangible value
Continuously invest in brand, R&D, digitalization, and HR and organization to strengthen organizational capabilities for innovation
Corporate Governance
Further promote medium- and long-term value sharing with shareholders and investors by linking key performance indicators (financial targets) and annual normalized OP with remuneration of executive officers.
| Performance evaluation indicators | |
| Yearly bonus |
|
|---|---|
| Restricted Stock Compensation (restriction period: in principle 3 years) |
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